I'm not even arguing against the concept of people dreaming all the time. I'm just pointing out that Rassah debases first hand experience as evidence when he makes a statement that could only be proven by empirical data.
There is empirical data. We can tell exactly when someone is dreaming now, by watching how active their brains are, and minoring the parts of their brains used for memory and cognition. We are even getting close to being able to see people's dreams (right now at best we can get a blurry picture once in a while). I haven't done those experiments of myself, so I don't have first hand experience.
In case you are wondering about reading images from brains, in the experiment a person would be hooked up to a brain scan (or maybe MRI, I don't remember), and then shown many different pictures or animals and things, like birds, elephants, furniture, etc. As they were shown this, the brain scanner would record which parts of their brain would get activated as they recognized and interpreted the image, and store it as a sort of Brain-to-Image dictionary. Every person's brain was different, so they had to do this for every person from scratch. Then, as the person dreamed, or thought of something, or were shown an image and asked to concentrate on it, the brain scanning machine would pick up on which brain parts were activating, and used a computer to put together a composite from the pictures to figure out what was being thought of. The resulting images were not clear or sharp, since they were composites of many brain activity signals the scanner recognized, but you could still make out birds, planes, etc.